Nike Announces Yet Another Round of Restructuring Amid Sales Drop

Nike’s promised turnaround under chief executive Elliott Hill is once more deferred.

The company announced Thursday it will restructure operations and cut jobs next year, after posting a sales decline of 4 percent in its latest quarter.

The so-called “Pace” plan will save the company $2.5 billion by fiscal year 2031, which will be reinvested in the business. The company will provide more detail on the strategy at its upcoming investor day, said Hill.

“It will help us build a stronger Nike for the future,” he told analysts on the company’s earnings call.

Starting next year, the company will be eliminating roles as part of the plan, which will cost the company $1 billion to implement including $300 million in severance costs, said chief financial officer David Denton.

Another part of the Pace initiative will be reorganising its business into three geographies instead of four. The company will combine its Greater China business with Asia-Pacific, and do the same with North America and Latin America to create two new geographies. Its Europe-Middle East-Africa business will remain the same.

Nike said this restructuring will allow it to better serve local and regional communities. It comes on the heels of sustained struggles to connect with consumers in Greater China. Nike hit its fifth straight quarter of decline in the region, with revenue dropping 22 percent in the latest quarter ending Aug. 31.

Overall in the quarter, Nike’s sales declined by four percent on a reported basis to $11.2 billion, which missed analyst expectations of $11.3 billion. Its gross margin expanded 60 basis points to 42.8 percent.

Hill maintained a positive outlook on the company’s overall strategy in the earnings call, underscoring the strength of Nike’s Sport Offense initiative, created in 2025 to focus on specific sports and performance. Sales in this category are up high single-digits, Hill said, on a $16 billion base.

As the company looks ahead, it expects revenues to decline high-single digits for the year. This was the first time the company has offered full-year guidance since October 2024.

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Should We Still Believe in Nike?

Despite all of Nike’s restructuring and reinventing, the company’s stock is hovering around $53 per share, which is as low as it’s been since 2017. The Street, and much of the public, still don’t believe in the comeback narrative.